Jobless rate trended higher, and job gains slumped to the lowest level in a year. The closely watched employment report came Friday, only adding gloom to a less rosy economic picture. A separate report on Thursday from the Commerce Department showed the first quarter economic growth was not as strong as first estimated. The slowed growth and weak job data sparked worries that the recovery of the world's largest economy may lose momentum.

JOB ENGINE STALLED

After continued decline for months, the jobless rate rose slightly to 8.2 percent in May with less-than-expected job gains. The disappointing data sent the stocks down by more than 1 percent in the morning trading session on Friday.

The economy merely added 69,000 jobs, fewer than half of market expectations. At the same time, the Labor Department revised down its estimate for the payroll gains for March and April by a total of 49,000 jobs.

The long-term unemployment problem remains acute. A total of 42. 8 percent of the unemployed have been out of job for more than 6 months.

The labor force participation rate edged up to 63.8 percent with more than 600,000 people rejoined the world force, which could be a positive sign.

Gary Burtless, a senior fellow at the Brookings Institution, said the latest employment report offered a "mixed and mostly unpromising" picture of the job market recovery.

"To keep pace with the growth in the working-age population employers need to add between 90,000 and 100,000 jobs every month, " Burtless said.

Mark Zandi, chief economist at Moody's Analytics, said the job market took "a big step back" in May and prompted a downward revision to the outlook for hiring over the next few months.

Another two previously released job indicators also accentuated the fluctuations in labor market improvement.

The weekly applications for unemployment insurance last week rose 10,000 to 383,000, a five-week high. It is above the threshold of 375,000 to indicate a sustained drop in the unemployment rate.

Moreover, a survey from the payrolls processing company Automatic Data Processing (ADP) showed that the American private sector added only 133,000 jobs in May, fewer than economists' average estimate of 150,000. Estimated gains for April were also revised lower to 113,000.

Economists say that the current pace of job growth is not very impressive and is consistent with an economy that is growing modestly.

GROWTH FELL BACK

The Commerce Department lowered its estimate for the growth of January-to-March period to 1.9 percent on Thursday, a deceleration from an initially estimated 2.2 percent pace. The figure was also pale in comparison with the 3-percent growth in the fourth quarter last year.

The downward revision largely reflected smaller gains in inventories, a higher estimate for imports, and even lower government spendings than first estimated.

Consumer spending, which accounts for about 70 percent of the U. S. economy, grew by a 2.7-percent annual rate, slight lower than the 2.9-percent uptick figure in the advance estimate released last month, but higher than 2.1 percent in the previous quarter.

Real exports of goods and services increased 7.2 percent in the first quarter, higher than 5.4 percent in the advance estimate. Real imports of goods and services increased 6.1 percent, higher than 4.3 percent in the advance estimate.

Real federal government consumption expenditures and gross investment decreased 5.9 percent, larger than the 5.6 percent decline in the initial estimate.

The change in real private inventories added only 0.21 percentage points to the first-quarter change in real GDP, lower than the 0.59 percentage point contribution in the first estimate.

On the positive side, gross domestic income, an alternative measure of national output, rose 2.7 percent in the first quarter, outpacing the GDP growth.

Many economists projected that the U.S. economy may expand at a modest rate of about 2 percent through the whole year.

INCREASING HEADWINDS

The weak showing with growth and job market reinforced the hypothesis that unusually warm winter may have helped boost recovery and sugared up some economic data.

Analysts argued that jobs which normally would have been added in the spring were created in the winter instead, bringing strong job gains averaged more than 200,000 per month between December and February.

"The economy has been unable to sustain the burst of momentum in the fourth quarter," said Millan Mulraine, economist at TD Securities.

Fears are growing that deepening financial crisis in Europe and fiscal uncertainties caused by the "fiscal cliff" -- Bush-era tax cuts are expiring at the year end and mandatory spending reductions are scheduled to kick in next year -- would dampen business confidence and hurt U.S. economy.

The Congressional Budget Office estimated that because of the combination of spending reductions and tax increases, the U.S. economy would shrink 1.3 percent in the first half of 2013.

The gloomy data also fueled market discussion about whether the Federal Reserve would take further actions to stimulate economy when its Operation Twist program phased out at the end of June.

Minutes of the Fed's April policy meeting showed that "several" officials indicated that additional monetary policy could be necessary if economic recovery lost momentum or downside risks became great enough.

Should June's numbers disappoint again, said Zandi, the strength of recovery would be in serious question and the Fed would need to act.